Unocal strikes onshore gas discovery

ANCHORAGE (AP) -- Unocal Corp. has announced the discovery of a new onshore natural gas deposit on the Kenai Peninsula.

An exploration well, located 35 miles south of Kenai, produced up to 11.2 million cubic feet of gas per day.

Company spokeswoman Roxanne Sinz described it as a ''very, very large find.''

''We knew there was gas there but we had been concentrating on oil,'' Sinz said. ''Now that circumstances are calling for more gas, we're taking another look at these areas.''

Unocal drilled the well in the Ninilchik Exploration Unit last year with its partner, Marathon Oil Co.

A report commissioned by the Anchorage Economic Development Corp. last year found that Southcentral Alaska will face natural gas shortages by the middle of the decade unless new reserves are discovered.

Some gas producers stepped up exploration last year, citing a couple of potential reservoirs that could help heat and power cities across the region for decades.

Unocal produces oil and gas in Cook Inlet and on the Kenai. It said the Ninilchik Unit and other prospects on the southern Kenai could contain reserves of between 100 billion and 600 billion cubic feet of gas.

The company said it will complete and test eight wells this year -- five in the Ninilchik Unit and three on the southern Kenai Peninsula.

Unocal holds a 40 percent stake in the well that it announced Tuesday and in the 25,000-acre Ninilchik Unit. Marathon is the operator and owns the remaining interest, Unocal said.

Unocal and Marathon had formed a company for a proposed gas pipeline that would connect this new production area to the Southcentral pipeline system.

''If we find more gas down there, that will determine whether this gas line is built,'' she said.